Intro to Stocks     Keys to Investing     Stocks offer the best potential return if you have a long-term timeframe     Time can be your greatest ally if your stocks have predictable growth     Predictable long-term growth is rare but attainable if your stocks have competitive advantage     Stocks     When you buy stock, you become an owner     If you wouldn't want to own the whole company, don't buy a piece of it     Think like an owner     Bonds and Cash     When you buy bonds, you become a lender     As a lender, you are legally entitled to interest payments each year as well as a principal payment when the bonds mature     When you keep your money in cash, you earn interest and you can retrieve your original investment any time you want     How You Profit from Stocks     When you buy stock, you are buying a share of future profits     Some of those profits are paid to you immediately as dividends     The remainder is reinvested in the company to grow profits     Your Edge     Competitive advantage is the investor's edge     Two types of advantage are cost and quality     The key question: Is this competitive advantage sustainable?     The Importance of Management     Management must have the ability to make the most of a company's opportunities     Managers must be worthy of your trust (and your money)     Exceptional companies led by quality managers will usually produce investment winners     The P/E     The p/e of a company's stock is its price/earnings ratio, also known as the multiple     To a buyer of stocks, the p/e is a measure of how many dollars must be paid for each dollar of a company's earnings     The better the prospects, the higher the p/e     Buying a Stock Part I     Stocks are bought and sold on the New York Stock Exchange or in the Over-The-Counter Market     There are spreads and commissions to be paid when you trade     The less trading you do, the fewer costs you will pay     Part II     Limit Day Orders are recommended     Use discount brokers     Don't listen to unsolicited advice     Why a Stock Market?     The stock market isn't a casino — it just plays one on t.v.     Companies need a stock market to raise money to grow     Initial public offerings (IPOs) are important to companies, not to investors     Myths of the Market     Agility is as important as ability     Markets are irrational     A little knowledge is better than none